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Bottom Line Safety 2 Goals Part One: Understand... The direct, indirect and unknown costs associated with workplace accidents The benefits of paying for safety proactively The tools and techniques to measure those costs and benefits Part two: Be able to... Estimate direct and indirect costs of an accident Determine the potential risk: probability and severity of an accident Complete a cost/benefit analysis including return on investment, business volume and units required to cover costs, payback period, and costing-back.

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Bottom Line Safety 3 Form Groups Introductions Elect a group leader Select a spokesperson

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Bottom Line Safety 4 The Legal Imperative The Fiscal Imperative The Social Imperative Why do employers “do” safety?

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Bottom Line Safety 5 Workers Compensation Basics How are rates determined? Manual rating - Basic rate applied to all industries of the same type or standard industrial classification (SIC). Expressed as: Dollars per $100 dollars of payroll Example: $3.15 per $100 dollars of payroll. Experience Rating - used to vary the company’s own rates, depending on its experience by comparing actual losses with expected losses.

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Bottom Line Safety 15 Business volume required to cover cost Volume = Cost of Loss Profit Margin Determine the business volume required to cover the cost of the potential accident which might occur in your scenario.

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Bottom Line Safety 16 Units required to cover costs Units Required = Business Volume Unit Selling Price Determine the number of humidifiers that must be produced to cover potential accident costs.

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Bottom Line Safety 17 Payback Period Payback Period = Total Investment Potential Accident Costs Determine the payback period for the corrective actions for your scenario.